Filing for bankruptcy is not simple. There are many factors to take into consideration, including lifestyle changes. Oftentimes, people filing for bankruptcy fear that they will not be allowed to keep their possessions and will end up losing all or most of their valued belongings.
Even though every bankruptcy case has to be evaluated separately, it would be safe to say that in most cases the debtor does not have to give up their property or possessions. The reason for this is that the law allows a comfortable amount of property exemptions. During and after the closing of the bankruptcy case, the exempted property is protected by law. In fact, exempted property allows you to keep not only the property that belongs to entirely to you but also the equity that you might have on the property. Equity means the difference between the value of your exempted property and the remaining debt.
Even within exemptions, there are a number of different points to keep track of. According to bankruptcy law, each state has the right to determine which kind of exemption, federal bankruptcy exemption or state exemption, should be applied to you. Some states allow you to make the choice between the two. In most cases the federal bankruptcy exemption would prove to be better for the person filing for bankruptcy. However, there are cases when the state exemptions might be more beneficial.
Whatever the choice you make as the person filing for bankruptcy be sure you are acting on the advice’s of an expert. To understand which type of property exemption would apply to you, it is important that you talk to a qualified bankruptcy attorney. Moreover, these processes have legal implications so you need to make sure you are doing the right things.